Marketaxess Holdings, Inc. · NASDAQ:MKTX
Marketaxess — Q1 2022 Earnings Presentation
19 slides from Marketaxess's earnings presentation, Apr 20, 2022
Slide 1: Q1 2022 Conference Call and Webcast
Q1 2022 Conference Call and Webcast April 20, 2022
Slide 2: Strategic Update
Strategic Update ❖ Rick McVey, Chairman and CEO 2
Slide 3: 1Q22 Strategic Update & Highlights
1Q22 Strategic Update & Highlights¹ • Second highest level of quarterly revenue and total credit trading volume; record total trading volume. • 19.1% estimated market share of combined U.S. high-grade and high-yield markets. Increase penetration in • Record: Emerging markets ADV, up 5%. core credit
Slide 4: Market Conditions and U.S. Credit
Market Conditions and U.S. Credit LIQUID U.S. CORPORATE INDEX (LUCI) U.S. HIGH-GRADE & U.S HIGH-YIELD TRACE VOLUME Q1 YoY Change HG TRACE: -7% 3 Month Rolling Volatility (% log scale) Benchmark Spreads* 3 Month Rolling Volatility U.S. High-Grade U.S. High-Yield 210 HY TRACE: -8% 12.8 3,000 190 Bench
Slide 5: Expanding the Client Network
Expanding the Client Network HIGHLIGHTS ACTIVE CLIENT FIRMS • Record active clients of 1,913 Active Domestic Firms Active Intl. Firms 2,100 • Record active international clients of 975 1,900 • Record Asia active clients, up 19%, representing over 50% of the 1,700 increase in active international cli
Slide 6: The Long-Term E-Trading Opportunity
The Long-Term E-Trading Opportunity TOTAL ADDRESSABLE MARKET – 2021 ESTIMATES1 MarketAxess 1Q22 ADV Total Estimated Addressable Market ADV $5.5B $22.6B U.S. High-Grade $1.6B $9.8B CORE PRODUCTS U.S. High-Yield $2.1B $20.0B EM Hard Currency $1.0B $30.0B EM Local Currency $1.5B $11.0B Eurobonds $288M
Slide 7: Update on Growth Initiatives
Update on Growth Initiatives ❖ Chris Concannon, President and COO 7
Slide 8: Open Trading is at the Core of All Products and Protocols
Open Trading® is at the Core of All Products and Protocols OPEN TRADING HIGHLIGHTS UNIQUE OPEN TRADING FIRMS • Over 36,000 orders and $20 billion notional value available through Open Trading central marketplace on average per day in 1Q22 1,800 • Estimated system-wide cost savings of $133 million fo
Slide 9: Trading Automation Continues to Grow
Trading Automation Continues to Grow HIGHLIGHTS AUTO-X TRADE VOLUME AND COUNT Q1 YoY Growth Trade Volume: 26% • Record active automation firms, up 34% Trade Volume Trade Count Trade Count: 37% • Record 280,000 trades completed using automated execution, up 60,000 300 Trade Count (in thousands) Trade
Slide 10: Product, Protocol & Revenue Type Diversification
Product, Protocol & Revenue Type Diversification HIGHLIGHTS RECORD PORTFOLIO TRADING VOLUME • Increasing contribution from new protocols, including $ 16 Dealer RFQ, Portfolio Trading, Diversity Dealer Initiative, $13.9 $ 14 $13.1 Mid-X, and Live Markets Volume (in $ billions) $ 12 • New protocols/in
Slide 11: Strength in Emerging Markets
Strength in Emerging Markets HIGHLIGHTS LOCAL MARKETS TRADING VOLUME Q1 YoY Growth 22% • Record emerging markets active clients of 1,348, up 8% $70 • Record total quarterly emerging markets trading volume of $60 Volume (in $ billions) $190 billion, up 7% $50 $40 • Record local markets trading volume
Slide 12: Financial Review
Financial Review ❖ Chris Gerosa, CFO 12
Slide 13: 1Q22 Financial Summary
1Q22 Financial Summary 1Q22 COMMENTARY Financial Results 1Q22 4Q21 1Q21 vs. 1Q21 • The 6% decline in commission revenue was due to lower Commissions 166,113 145,913 175,838 (5.5%) transaction fees offset by a 17% increase in distribution fee revenue Information Services 9,809 9,561 9,162 7.1% • Reco
Slide 14: Commission Revenue Detail
Commission Revenue Detail Commissions 1Q22 4Q21 1Q21 1Q22 vs. COMMENTARY (1Q22 vs. 1Q21) 1Q21 U.S. High Grade Transaction Fees • Reduction in transaction fees mainly due to reduction U.S. High Grade 52,878 46,173 65,356 (19.1%) in fees per million, which was impacted by the Other Credit 75,804 62,76
Slide 15: Expense Detail
Expense Detail 1Q22 vs. COMMENTARY (1Q22 vs. 1Q21) Expense Summary 1Q22 4Q21 1Q21 1Q21 • Total expenses of $98.0 million, up 7% on Employee Compensation and Benefits 47,756 41,218 48,088 (0.7%) continued investment; up 5%, excluding acquired intangible amortization Depreciation and Amortization 15,1
Slide 16: Cash Flow and Capital Management
Cash Flow and Capital Management QUARTERLY OVERVIEW TTM FREE CASH FLOW 1 AND CAPITAL Q1 TTM FCF YoY Growth2 EXPENDITURES 5YR CAGR 12% • Total cash and investments of $400.4 million TTM Free Cash Flow TTM Capital Expenditures 350 100 TTM Capital Expenditures ($ millions) • Trailing 12-month capital e
Slide 17: Key Takeaways
Key Takeaways • Strong execution against growth strategy • Market conditions improving in global fixed income • Results reflect increasing product/international diversification • New protocols (e.g., Live Markets, Mid-X, Portfolio Trading) gaining traction • Trading automation adoption continues to
Slide 18: Disclosures
Disclosures ©2022 MarketAxess Holdings Inc. (the "Company"). MarketAxess Corporation is a member of FINRA and SIPC. MarketAxess Canada Company is a member of IIROC. MarketAxess Europe Limited (04017160), MarketAxess Capital Limited (09777893), and MarketAxess Post-Trade Limited (01917944) are incorp
Slide 19: Now you're in the market
\V, aN Now you're in the market™